I-Team: Illegal Bottle Redemptions Costing State Millions

ATTLEBORO (CBS)- It was a memorable episode of “Seinfeld”. Kramer and Newman filled a truck with bottles and cans in New York and went on a road trip to Michigan.

They were dreaming of getting rich by redeeming those beverage containers for 10 cents apiece when they had only paid five cents a piece in New York.

The problem is that fiction has become reality in Massachusetts. Honest taxpayers are losing millions of dollars each year in these types of fraudulent returns

The I-Team found there is little stopping out of state residents from scamming the system. In fact our cameras captured video of trucks with Rhode Island plates filled to the brim with empties. We watched as vehicle after vehicle like this came into a redemption center in Attleboro to make redemptions. We saw one man wheeling in heavy barrels while wearing protective gloves.

While Massachusetts has a five-cent deposit for soda and beer containers, neither Rhode Island nor New Hampshire has a bottle bill.

Environmental consultant Kevin Dietly of Northbridge Environmental in Westford said there is virtually nothing stopping a person from bringing out of state containers into Massachusetts for redemptions.

The I-Team followed Joao Lomba from Yankee Spirits in Attleboro back to the parking lot of a social club in Pawtucket, Rhode Island after we saw him redeem hundreds of containers.

He told us he takes the bottles from the Rhode Island bar twice a week and brings them into Massachusetts to get refunds.

“We estimate that something like 6-8% of all returns that come back each year are fraudulent,” said Dietly. “That probably costs the Commonwealth between four and six million dollars a year.”

Dietly explained that the consumer and the taxpayers are the losers when this type of fraud occurs.

“We are going to pay more in taxes because there is revenue that is not coming into the state,” he said.

Officials on Beacon Hill have known about this problem for years. The I-Team found a report from 1998 which warned the system was ripe for fraud. That was 15 years ago, and it appears little has changed to stop millions of dollars from flowing over state borders.

Gregg Cooper oversees recycling programs for the Department of Environmental Protection and said he would like to see less money escaping from the system. He added he would like his agency to have the power to issue their own penalties, instead of having to bring complaints to the Attorney General’s office.

Cooper also believes technology needs to be improved so containers can be identified better.

“The distributors need to be actively involved in identifying their products, such as putting an extended bar code on their containers to make sure reverse vending machines do not read out of state containers,” he said.

The fines for illegal redemptions can go as high as $25,000.

The state requires redemption centers to have a way of warning customers of the consequences of illegal redemptions, usually by posting a sign.